Bank of America Holders to Vote on Merging Chairman/CEO Posts, But Not Today

Bank of America investors didn't object to the person chosen as chairman and CEO, but to the process of merging roles they had decided to split in 2009.

UPDATE: This article, originally published at 9:36 a.m. EDT Wednesday, May 6, has been updated to reflect shareholder votes at Bank of America's annual meeting.

NEW YORK (TheStreet) -- Bank of America (BAC) investors didn't object to the person chosen to fill the roles of chairman and CEO last fall. What bothered them was that the bank's board didn't consult them when it decided to reunite the two jobs, reversing a binding shareholder vote made during the financial crisis.

In the end, their objections, along with recommendations from two proxy-advisory firms to vote against board members who backed the change, were strong enough to convince the Charlotte-based bank to give investors a vote on it. Just not at today's annual meeting.

"We were getting fairly consistent feedback that shareholders were upset with the process" although they seemed fine with CEO Brian Moynihan serving as chairman, said Lawrence Di Rita, a Bank of America spokesman. To address that, the bank said in a regulatory filing on Monday that shareholders will get a chance to weigh in no later than the company's 2016 annual meeting.

The top jobs at Bank of America had been split since 2009, when investors stripped then-CEO Kenneth Lewis of the chairman's title. That decision followed his acquisition of investment bank Merrill Lynch near the end of 2008, at the height of a financial crisis that froze credit and wiped out about half the value of equities markets. After the deal was completed, Merrill announced $15 billion in fourth-quarter losses.

In reversing the shareholder vote, Bank of America maintained that it had passed narrowly, with a 50.3% majority, and reflected investor sentiment during a distressed time. Conditions now are different, the bank said in its proxy filing for today's meeting in Charlotte.

Today, not only are 13 of the bank's 15 directors independent, the board attempted to adhere to shareholder wishes by creating the role of lead independent director for periods in which the roles of chairman and the CEO are held by the same person, the company said.

Shareholders, who were in a position to punish the bank, saw the matter differently. The recommendation from advisory firms Institutional Shareholder Services, or ISS, and Glass Lewis against four directors who backed the change could have cost them their posts, since winners are determined based on a majority of votes cast.

The four identified by ISS -- Sharon Allen, Frank Bramble, Thomas May and Lionell Nowell, all of whom sit on the board's corporate governance committee -- were ultimately re-elected on Wednesday, along with the bank's nine other nominees.